12 Questions
What is the primary goal of transacting parties in a transaction cost analysis?
To conduct the transaction in an economically efficient manner
What is the definition of outsourcing in the context of supply chain management?
The contractual delegation of an in-house service to an external supplier
What is the first level of supply chain specificity, according to TCE?
Site specificity
What type of specificity involves equipment with unique design features that have lesser economic value in other usage?
Asset specificity
What is the primary benefit of a supplier working with a single client, according to TCE?
Lower ex-post transaction costs for contract monitoring and enforcement
What type of uncertainty involves variables like input prices and consumer confidence?
Demand uncertainty
What is an example of physical asset specificity in supply chain management?
A coal-mining plant located near an electric power plant
What is an example of dedicated assets?
Production capacity for a particular customer
What are the three principal attributes of transactions, according to TCE?
Asset specificity, uncertainty, and frequency
What type of uncertainty involves predicting the behavior of one exchange party in an unanticipated event?
Behavioral uncertainty
What is an example of temporal specificity?
Perishable fruits
What is the result of learning-by-doing processes?
Investments in relationship-specific human capital
Test your knowledge of supply chain management, outsourcing, and transaction cost theory. Learn how to manage activities and networks to produce goods and services from suppliers to end users.
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